08 November 2019

Main results - Economic and Financial Affairs Council

Climate finance

The Council adopted conclusions on climate finance ahead of COP25, the UN climate change conference, which will take place in Madrid from 2 to 13 December 2019.

The EU and its member states remain the largest provider of public climate finance. Their total contributions amounted to €21.7 billion in 2018, up from €20.4 billion in 2017.

Climate finance: EU and member states' contributions up to €21.7 billion in 2018 

Taxation

Digital taxation

Ministers took stock of the state of play of work during the Finnish Presidency on the ongoing OECD discussions regarding tax challenges arising from the digitalisation of the economy, and exchanged views on the way forward in this area in the coming months.

The discussions showed support for the Presidency's proposed way forward and work will continue on that basis in Council's preparatory bodies. Ministers also stressed the need to ensure that the various solutions at international level are compatible with EU law and that their impact is thoroughly analysed.

The ongoing OECD development consists of two work streams:

• Pillar 1 examines rules concerning the reallocation of profits of digitalized businesses by determining new rules on where tax should be paid and what portion of profits should be taxed in a particular jurisdiction.
• Pillar 2 explores the design of a system to ensure that internationally operating companies pay a minimum level of tax aiming to protect the countries' tax base from base erosion and profit shifting.

The work in the OECD has intensified during past months and the aim of the OECD is to have a political agreement on the overall architecture of the reforms by January 2020 and a final report by the end of 2020. 

VAT rules

The Council today reached agreement on two reforms of existing VAT rules.

The first reform concerns the detection of tax fraud in cross-border e-commerce transactions. The new rules will enable member states to collect, in a harmonised way, the records made electronically available by payment service providers, such as banks. In addition, a new central electronic system will be set up for the storage of the payment information and for the further processing of this information by national anti-fraud officials.

E-commerce: Council reaches provisional agreement on new rules for exchange of VAT payment data 

Related press release: Joint Industry Statement - Council adoption of VAT reporting measures – payments industry remains concerned

The second reform concerns VAT rules applicable to small businesses. The new rules will reduce administrative burdens and compliance costs for small enterprises and help create a fiscal environment which will help SMEs grow and trade cross-border.

VAT: Council reaches provisional agreement on simplified rules for small businesses 

Excise duties

The Council reached a provisional agreement on measures to improve the business environment for trade in goods subject to excise duties by further improving conditions for fair competition and reducing the administrative burden for companies.

The Council agreed on the following proposals:

• the directive on general arrangements for excise duty
• the regulation on administrative cooperation on the content of electronic registers

Excise duties are indirect taxes on the sale or use of specific products, such as tobacco or energy. The revenue from these taxes goes entirely to the country to which they are paid. Since 1992, EU countries have had in place common rules to make sure that excise duties are applied in the same way and to the same products everywhere in the EU

Excise duty: Council agrees on a modernised framework for excise goods (press release, 8 November 2019)

Nomination of a new member of the ECB executive board

The Council issued a recommendation to the European Council on the nomination of Isabel Schnabel, currently a professor at the University of Bonn and a member of the German Council of Economic Experts, as its candidate to replace Sabine Lautenschläger on the executive board of the European Central Bank.

The European Council is expected to take a formal decision on the appointment by the end of the year, after having consulted the European Parliament and the ECB's Governing Council.

ECB executive board: Eurogroup gives support to Isabel Schnabel's candidacy (Eurogroup press release, 7 November 2019))">ECB executive board: Eurogroup gives support to Isabel Schnabel's candidacy 

Stablecoins

The Presidency informed ministers about a draft joint statement of the Council and the Commission on stablecoins to be agreed at the December Ecofin.

Draft joint statement by the Council and the Commission on stablecoins 

Full press release

Related:

Opening remarks of Vice-President Valdis Dombrovskis at the ECOFIN press conference

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